Decision Notice - CIRO Hearing Panel issues Reasons for Decision in the matter of Fortrade Canada Limited

TORONTO, March 21, 2024 /CNW/ - Following a settlement hearing held pursuant to the Investment Dealer and Partially Consolidated Rules on February 21, 2024, a hearing panel of the Canadian Investment Regulatory Organization (CIRO) found that Fortrade Canada Limited (Fortrade), an order execution only (OEO) firm, made recommendations to clients notwithstanding that the CIRO rules prohibit Dealer Members from providing recommendations to clients holding OEO accounts. Fortrade also failed to establish and maintain a supervisory system that was reasonably designed to achieve compliance with CIRO requirements and failed to retain adequate records to demonstrate compliance with CIRO requirements.

The hearing panel's reasons for decision, dated March 11, 2024, are available at:

Re Fortrade Canada, 2024 CIRO 36

In its reasons for decision, the hearing panel confirmed the sanctions imposed on Fortrade. In particular:

a)  fine of $2,000,000,

b)  payment of US$703,478.91 to clients with unresolved recommendation-related complaints received as of July 7, 2023, and representing net losses incurred by the clients up to November 9, 2022, the date of the Temporary Order,

c)  creation of a fund of US$6,000,000 (Fund) to be used to make payments to eligible clients who make a claim to the Fund,

d)  retention, in a location in Ontario, Canada, of telephone call recordings of calls with Fortrade clients for seven years from the date of each call, and

e)  the Temporary Order will remain in effect until Fortrade has satisfied the above terms and notice has been provided to eligible clients in respect of their ability to make a claim to the Fund.

Fortrade is also required to pay costs in the amount of $100,000.

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All information about disciplinary proceedings relating to current and former member firms and individual registrants under the Investment Dealer and Partially Consolidated Rules (for investment dealers), the Mutual Fund Dealer Rules (for mutual fund dealers) and the Universal Market Integrity Rules (UMIR) is available on CIRO's website. 

Background information regarding the qualifications and disciplinary history, if any, of advisors currently employed by CIRO-regulated investment firms is available free of charge through the AdvisorReport service. Information on how to make dealer, advisor or marketplace-related complaints is available by calling 1-877-442-4322.

CIRO investigates possible misconduct by its member firms and individual registrants. It can bring disciplinary proceedings which may result in sanctions including fines, suspensions, permanent bars, expulsion from membership, or termination of rights and privileges for individuals and firms.

The Canadian Investment Regulatory Organization (CIRO) is the national self-regulatory organization that oversees all investment dealers, mutual fund dealers and trading activity on Canada's debt and equity marketplaces. CIRO is committed to the protection of investors, providing efficient and consistent regulation, and building Canadians' trust in financial regulation and the people managing their investments. For more information, visit www.ciro.ca.

SOURCE Canadian Investment Regulatory Organization (CIRO)

Joanna Nicholson, Manager, Corporate Communications and Public Affairs, [email protected], Phone: [phone]